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T h e G r e a t N e t w o r k s o f L i f e

A N N U A L R E P O R T

1 9 9 7

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Board of DirectorsGérard MOHR

Chairman & Chief Executive Officer

Christian PÉGUETDirector & Managing Director

Directors

Michel DAVELUYHenri DELHAYE

Bernard HUVELINPhilippe LEMAISTRE

Roger MARTINGuy RICHARD

Société Générale d’Entreprises (SGE),represented by Antoine ZACHARIAS

AUDITORS

Statutory AuditorsDeloitte Touche Tohmatsu - BMA

Salustro ReydelAlternates

Michel BousquetFrançois Pavard

Summary of contents

Questions and answers for 1997 2

Key figures for 1997 4

Operational organisation

of the GTIE Group 5

A complete service provided 6

Infrastructure 8

Building services 12

Industry 16

Overseas Development 20

Management report

and summary of accounts 24

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The power

of a vast network

The GTIE Group is a unique network of business

units whose core staff of 18,000 professionals

pool their expertise in the energy, information

technology and communication sectors.

One of the Group’s major strengths is its ability

to act both locally and globally, by delivering a

complete, customised service - a global solution -

from engineering to maintenance, even operations.

This tightly woven network thrives on a system of

interactivity creating synergy, which constitutes one

of the Group’s primary advantages. Each business

unit, reinforced by network synergies and

improved responsiveness, adapts continuously to

very different client needs, whether operating on

local markets or expanding in Europe and

throughout the world.

QUESTIONS AND

ANSWERS FOR 1997

What were the most significant events of 1997for the GTIE Group?

Gérard Mohr: 1997, was first and foremost theyear in which a closer relationship was forgedwithin the SGE Group, on the initiative of thecommon shareholders of GTIE, Santerne andSDEL.

The new GTIE Group - backed by over FRF 11 billion in turnover, its 18,000 employeesand key market positions in Europe, especially inGermany, Great Britain and the Netherlands - isrecognised as France’s leading operator in theengineering, procurement, construction inelectrical power and communications sectors.

What is the new Group’s operationalstructure?

Gérard Mohr: This new grouping’s operationalstructure is designed, above all, to meet ourclient and market needs. It hinges on 450autonomous business units, located close to theirclients, who have their own identity and clearbusiness plan. These companies have beengrouped into four geographical managementsectors: SDEL in the greater Paris area and theinternational market, Fournié-Grospaud coveringmost of southern France, Garczynski Traploir inwestern France and in the Overseas Territoriesand Departments and Santerne coveringnorthern and eastern France.

Our strong efforts over the past year have

Pictured, left to right

Patrick LEBRUNCompany Secretary, GTIE Group

Jean-Yves LE BROUSTERChairman & CEO, FOURNIÉ-GROSPAUD

François-Xavier HANICOTTEManaging Director, GARCZYNSKI TRAPLOIR

Philippe LEMAISTREManaging Director, SDEL

Christian PÉGUETDirector & Managing Director, GTIE Group

Gérard MOHRChairman & CEO, GTIE Group

Michel DAVELUYFinancial & Administration Director, GTIE Group

Charles LICENDeputy Managing Director, SANTERNE

2

confirmed the strength of this operationalstructure, and enabled us to carry out therequired structural modifications and set up acommon management information system. Ouremployees have readily understood andaccepted these reorganisational moves, which are now completed and operational.

With this new structure, what were the GTIEGroup’s results in 1997?

Gérard Mohr: In 1997, the first financial yearunder its new organisation, the GTIE Grouprecorded consolidated turnover of FRF 11.2billion, which on a comparable Group structure,is in line with 1996. The Group also showed atotal profit before tax and employee profitsharing and after amortisation of capital gains,of FRF 358 million, and net profit of FRF 160 million, which represents a rise of 11% on a comparable basis against last year.

Our business units were to cope well with theorganisational upheavals relating to the launch ofthe new GTIE Group and the overall difficulteconomic situation (regardless of a slightupswing in the third quarter).

The economic situation’s main impact on GTIEGroup activities in France were: weak orstagnant demand in French electricityconsumption within the framework ofderegulation; strict control of expenditure andcareful choice of investments in the publicsector, intensive competitive efforts by rivalcompanies in the private sector, whose horizonsare becoming more and more global with theconsequent repercussions on their suppliers.

Abroad, market conditions remained buoyant inGreat Britain and the Netherlands, in contrast tothe German market which suffered a steepdownturn. Over and above these very generaltendencies, even the most cursory market analysisby segment reveals the contrasts between thevarious sectors in which the Group is active.

What exactly are the Group’s main areas ofactivity?

Gérard Mohr: The Group’s activities fall intothree main areas: infrastructure (37% of totalactivity in 1997): facilities for the building andservices sectors (24%); and industrial processfacilities (39%). In these three areas, described indetail in the following pages, the Group’scompanies provide services connected with

either electrical power (63% of the total) orwith information processing and communication,a field which is developing continuously andwhich produced a turnover of more than FRF 4 billion in 1997, over 37 % of the total.

How is international expansion progressing?

Gérard Mohr: The Group is regularly active inabout twenty countries and, in a few years, hasbuilt up permanent operations in eleven:Germany, Great Britain, the Netherlands,Belgium, Denmark, Switzerland, Poland, theCzech Republic, Senegal, Malaysia and Singapore.

The contribution from international projects toconsolidated turnover rose to 12.5% in 1997.International expansion of our businessnetworks, especially in Europe, constitutes a keyelement for increasing Group earnings.

What are the GTIE Group’s prospects for1998 and the years ahead?

Gérard Mohr: 1997 opened a new chapter inthe history of the GTIE Group, which rankstoday among Europe’s leaders in engineeringprocurement and construction in electricaltechnology. It was a major task to consolidatethe new structure, the product of a unionbetween companies with very different culturesand identities, and to set it in an organisationalframework that was unambiguous, transparentand customer-oriented. Now, we are ready tomove ahead.

These are the cornerstones on which we areconstructing our future - a market segmentationstrategy by business units based on marketposition, an emphasis on networking and amanagement philosophy that gives priority toour customers, our employees and ourshareholders.

The new GTIE Group should perform well in1998, given these conditions. It can, thus,continue to launch business networks in Europeand worldwide, supported by a solid Frenchbase.

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5

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Garczynski TraploirZIN- rue Thomas-Edison 37 X72040 Le Mans CedexTel-: (33-2) 43 77 77 77Fax-:(33-2) 43 28 50 19

SDELImmeuble Gallieni2, rue Benoît-MalonBP 14492154 Suresnes CedexTel-: (33-1) 41 38 50 00Fax-:(33-1) 41 38 50 50

Fournié-Grospaud19, impasse FourcaranBP 216031021 Toulouse Cedex 2Tel-: (33-5) 61 58 79 00Fax-:(33-5) 61 58 04 64

Santerne23-25, rue du Dépot62063 Arras Cedex 992154 Suresnes CedexTel-: (33-3) 21 60 93 00Fax-:(33-3) 21 48 32 95

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450 fully autonomous business units with

their own strong corporate identity and

sense of purpose divided into four

geographical management zones, enable us

to adapt quickly to our customer and

market needs.

The GTIE Group’s operational structure

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4

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in FRF million in euros million

Net turnover 11,169 1,675

Operating profit 429 64

Operating profit after interest 506 76

Net profit 159 24

Cash flow from operations 540 81

Capital expenditure 429 64

Net turnover 1997

Workforce

18,400

24 % service and building sectors

37 % infrastructure

37 %information processing and communications

63 % electrical power

39 % industry

Key (consolidated) figures for 1997

6

Every client is different, as are his

projects, whether they involve new installations,

or upgrades of existing ones. He enjoys

continuous follow through, from consultancy and

design, to turnkey facilities, maintenance and

operations.

In order to provide city or town

lighting, the Group’s companies provide a full

line of services: an analysis of existing systems, a

new lighting plan, engineering and development

of a lighting network and maintenance. They

also set up facilities for supervising operations

and for information management. Group

companies can manage the entire project, from

A to Z, including special needs, such as seasonal

festive lighting all with a commitment to

mutually agreed results within a specified

budget.

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A complet

From consultancy to turn-key projects

Local presence, willingness to

listen, responsiveness are hallmarks

shared by companies in the Group.

They are constantly raising the

quality of their service offerings to

satisfy customer needs better. By

pooling their expertise, resources

and experience, Group businesses

are able to manage the most

complex and exacting projects,

while assuring the fulfilment of the

most extensive and exhaustive

requirements.

7

relay stations for mobile telephones. They cancarry out all installation phases for companycommunication networks, right up to takingcomplete charge of engineering and operations- in other words, overall I.T. systemsmanagement.

The Group has successfully demonstratedits ability as a designer and integrator ofsystems for Industrial Process Control andAutomation; DCS and PLC systems.

Today the Group is expanding its range ofglobal solutions to meet the expectations of theindustrial maintenance sector. After havinginstalled and precommissioned all the controlsystems for the Elf Leuna 2000 refinery inGermany, the Group’s companies have joinedforces to guarantee the maintenance of theinstrument, electrical and mechanical facilities forthe next five years.

The Group’s companies have an active role inevery link in the telecommunicationschain, from providing the infrastructureneeded by operators to implementing companyor community voice-data-image networks. Theycarry out surveys for proposed sites and install

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te service provider

Maintenance plan for 35Chronopost sorting centres

Infras

Guaranteeing the highest

quality service and user

safety, while protecting the

environment, are primary goals

of infrastructure operators and

local government leaders.

for the environmentQuality of service, safety and respect

tr uctur e

Infrastructure

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We carry out the most specialised

projects for infrastructure operators

and local governments in such fields

as: production, transportation and

distribution of electrical power, city

and town lighting, road, air, river, sea

and rail traffic networks, meteorology,

communication networks and other

urban projects.

Electrical power

One of the most pressing concerns of

infrastructure programmes is the quality of their

integration with the environment. The Group is a

long-standing innovator in this field where it has

been actively designing solutions that address these

concerns.

Development of underground high-voltage lines,

involving significant capital investment, represents

an important stake in the future. The Group’s

companies have perfected a range of solutions by

putting together specific components, for

providing transformer-stations that blend into the

environment, called ATOLL, which are in the

process of development.

Electrical power can also contribute to

environmental quality. This is why the GTIE Group

is involved in the PRAXITÈLE project - an

experiment involving electrically powered self-

service vehicles in Saint-Quentin-en-Yvelines.

10

Laying a HV underground power line at Aix-en-Provence

Installing a radio communications relay for the SFR network

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11

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Lighting

Lighting makes a vital contribution to the quality of

life and safety, while making villages and towns

more attractive. A well-lit road at night is safer for

pedestrians and drivers. A monument, central

square or other site, artistically lit, does full justice

to a community’s heritage. A town that springs to

life and becomes more beautiful for residents is

itself a cause for celebration.

The Group’s companies, backed by their

professional teams’ long experience in this area and

their awareness to both technical evolution and

local authorities’ requirements, offer a full product

and service line adapted to specific customer

needs.

Transport

Transport users are primarily concerned with safety,

comfort and efficiency. This includes

well-lit motorways, emergency call networks for

improved safety; better-regulated road, air, river and

sea traffic lanes guided by accurate data systems.

Users want easy access to town centres and

car-parking systems designed to assure quick entry

and exit and real-time information.

The GTIE Group is at the cutting edge of these

services. Having successfully completed earlier

projects including Sirius in Paris, Coraly in Lyon or

Migrazur on the Côte d’Azur, it took part in new

landmark operations in 1997, including Siter in

Hauts-de-Seine.

Communicationinfrastructures

The Group is extensively involved in

communication infrastructures from site selection,

installation and maintenance feasibility studies to the

maintenance of radio-communication relay stations.

Group businesses set up and maintain transmission

networks and local networks for the main

operators.

Roissy: Air terminal 2F

Positioning a mobile telephone antenna

10

AXA - Place Vendôme - Paris.

La Défense, Société Générale Towers

We design facilities for the

building sector. These

buildings promote a better

quality of life where people

communicate in a common space.

They are adapted to meet the

everyday needs of their

occupants: easy access, quick

document and image exchanges,

complete security for people

and property, facilities to

accommodate teamwork.

Tribunal de Grande Instance,Bordeaux

quality of life throughimproved communications

Buildingservices

14

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The buildingservices sector

Service sector facilities in the fields of

education, hotels, health, culture, sports

and leisure, shopping centres and

hypermarkets, logistical centres,

banking, insurance, government and

office buildings, are also centres of

community life where demands for

technical equipment, safety and voice-

data-image communications are

increasing dramatically.

Whether it’s a matter of new buildingsor renovation, the GTIE Group’s companies fully

master the technologies they implement in

electrical and information networks, management

techniques and communication systems, especially

important for occupied offices which have to be

renovated without disrupting the normal work flow.

By pooling resources they are able to carry out a

full technical renovation programme; they add to

this well-rounded expertise, a sound understanding

of how these sectors operate and their special

requirements.

Corporate communications

This expertise is essential for developing the

increasingly complex, integrated voice-data-image

networks, which the Group’s customers are

building to take full advantage of the information

technology revolution unfolding before our very

eyes. The Group’s companies, benefiting from

their strong support network, are able to

propose a full range of services and technical

solutions, from simple consulting to complete

information management i.e., design-

implementation-operations.

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15

Maintenance

The complexity of equipment installed in today’s

facilities, including monitoring and supervision of

heating, air conditioning, power, fire detection,

control of alarms and access, centralised

management techniques, sound and video

systems, demand a high degree of systematic

quality maintenance. This affects performance

and reliability, as well as the safety and well-

being of occupants.

The Group’s companies, highlighting the

network’s strengths, have devised a complete

spectrum of customised, local services to meet

this demand.

L’Oréal - Aulnay-la-Barbière

Cegetel Capitol

Rewinding of motors in Birmingham

Cabling of aircraft systems

Lubrizol - Le Havre

The priority of industrial

companies is to produce

better, faster and at lower

costs, whether in the

automobile, petroleum, food

and agriculture, aeronautics,

chemicals or pharmaceutical

sectors.

Quality, scheduleand cost control

Pharmaceutical laboratory

Industry

Industry

➔

Industrial companies must have,

above all else, reliable, responsive

and flexible production facilities

that guarantee quality and

accountability. They strive to

optimise their return on their

capital investment, while integrating

and rechanneling ever more

sophisticated information flows.

GTIE Group companies provide

daily support to help achieve these

goals, at the heart of industrial

processes.

Close to industrialcompanies and theirproduction processes

GTIE Group companies, supported by more

than 500 installations located near production

sites, offer industrial customers an exceptionally

close-knit network of experts, readily available

and dedicated to their professions.

All proposals are based on sound knowledge of

the industry in question. Group businesses have

a long-standing policy of specialisation by

industry; thus managers place a strong emphasis

on fully understanding each client’s industrial

processes, risks, goals and development path.

Drawing on their proven expertise in energy

and information networks, combined with their

integration and design skills, they propose the

solutions best suited to each project.

Renault Maubeuge automobile plant

Colombes effluent treatment plant

18

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A global serviceoffering

The Group’s companies can tap the resources of

a multi-network operation, providing global

proposals, to meet customer needs. These

include a wide range of industrial projects, from

the construction of a grass roots installation to

debottlenecking, optimisation and revamping.

Network businesses draw from an expert

knowledge base to also cover client needs in

hydraulics, robotics and industrial production

technology. They can link up the recognised

leader in each process with the local partner

who is closer to the situation, thereby, drawing

on internal and external skills to offer the best

solutions to specific problems. The Group’s

companies, accustomed to this work method

and on the basis of many years of experience,

complement each other in a spirit of

co-operation. However, the customer benefits

from having a single spokesperson and project

manager, who settles operational issues and is

fully accountable for project performance.

Specialised products

The GTIE Group, based on a strong mastery of

existing management tools, has developed special

products, especially in software applications,

enabling it to improve and round out its service

offering. CPI/GFA, for example, built on the easy-

to-access UNIX platform, is a multi-function

software application for supervising and

managing industrial and manufacturing processes

and centralised technology operations. Available

in several languages, this software is today used

on more than 500 industrial sites and will see

important new developments.

Zafiro Mobil:Floating, Production, Storage and Offloading (FPSO) platform. Equatorial Guinea

Overseas

From its solid French base,

the GTIE Group is present in

some 20 countries including 11

on a permanent basis.

In Europe and throughout the world

development

22

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Overseas development

The GTIE Group, regularly active in

some twenty countries, is permanently

established in eleven: Germany, Great

Britain, the Netherlands, Belgium,

Denmark, Switzerland, Poland, the

Czech Republic, Senegal, Malaysia and

Singapore.

Local operations and a network with a worldwide reach

The GTIE Group, supported by its networks of

450 companies, is geared to intervene quickly,

in continental France, the French Overseas

Territories and Departments, Europe and

throughout the world.

Every one of its autonomous and independently

managed business units benefits from the financial

backing of a major group and support in

numerous areas including training, development

and communication. Well established in their local

areas and very close to their customers, they are

also equipped for major projects, even projects

far away from their home bases, because they

share with the whole network the same values of

unity, strict professionalism and innovation.

The “Club Med” village at Cap Skiring in Senegal

In Europe and acrossthe world

Group businesses have adapted to the

increasingly global economy and trading system

and have seen their customer base widen

accordingly. By acting local and thinking global,

the Group’s networks throughout Europe and

across the world are able to bring their

strengths to bear on the most distant projects.

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23

A long-standing overseas presence

The GTIE Group, based on solid positions in

continental France, has established a long-term

presence in France’s Overseas Departments and

Territories. More than 500 experts work for the

Group in the Guadeloupe and Martinique

archipelagos, in the Antilles, Guyana and on the

Island of Reunion. Operating closely with

network companies in continental France, local

Group businesses have consistently contributed

to the well-balanced growth of these overseas

operations.

The Vasco da Gama bridge on the Tagus. Lisbon, Portugal

The Maxwel workshops in Radon, Poland

Management Report and Summarised Financial Accounts

for Fiscal Year 1997

Statutory auditors’ report on theconsolidated financial statements

(for year ended 31 December, 1997)

An audit also includes assessing the accounting principlesused and significant estimates made by management,as well as evaluating the overall financial statementpresentation. We believe that our audits provide areasonable basis for our opinion.

In our opinion, the consolidated financial statements,referred to above, present fairly, in all material respects,the culture and financial status as well as the financialresults of the entire group of companies included in the statements. Without qualifying our opinion, we drawyour attention to note 2, paragraph 6 of the appendix,which describes a change of accounting method used in relation to retirement agreements.

We have also verified the information provided in thereport concerning management of the Group. We aresatisfied that the information is fairly stated and agreeswith the consolidated financial statements.

In accordance with the assignment given us by theAnnual General Meeting, we have audited theaccompanying consolidated financial statements of theGTIE Group for the financial year ended 31 December1997 such as they are presented in the present annualreport.

The financial statements are the responsibility of theBoard of Directors. Our responsibility is to express anopinion of these financial statements, based on ouraudit.

We conducted our audit in accordance with generallyaccepted French auditing standards. These standardsrequire that we plan and perform the audit to obtainreasonable assurance as to whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.

Paris and Neuilly, 7 April, 1998

The Statutory Auditors

Salustro Reydel Deloitte Touche Tohmatsu - BMA

Bernard Cattenoz Bertrand Vialatte Michel Bousquet

24

The market

Despite a slight improvement in the third quarter, a difficulteconomic climate worldwide continued to affect the GTIEGroup’s various markets throughout 1997. Recognisabletrends include weak electricity consumption in France,imminent deregulation, stringent control of expenses and a selective approach to capital spending for public sectorworks, stiff competition from rival companies, often on aninternational scale with attendant repercussions on suppliers.

Beyond these general tendencies, only a market sector analysis will reveal the contrasts between the various sectorsin which the Group is active. The number of programmeswas reduced for the transmission of electrical power, for reasons just given, particularly in the case of high-voltagelines. In response to increased competition, the Group’s business units are focusing on productivity and innovation inconnection with underground high-voltage links or electricitysubstations that blend into the environment.

There is a significant need to address environmental and lifestyle concerns in rural electrification and public lighting, yetprogrammes are subject to substantial budgetary constraints,including financial and tax budgets.Amidst heightened competition, the Group’s business units remain focused onresearch in the core areas of quality, modernisation and innovation.

On a more encouraging note, promising new developmentsare emerging in the field of infrastructure linked to electricpower and information. Several of the Group’s business unitsare involved in the PRAXITEL project - an experiment withself-service electrically powered vehicles at Saint Quentin-en-Yvelines. Backed by references from Sirius, Coraly, Migrazurand, more recently Siter, the Group is ideally positioned to provide management systems for controlling traffic andsignals in urban areas. Finally, the Group is extensively involved in developing telecommunications infrastructure, asector in full expansion, which is nevertheless, subject to stiffcompetition.

The industrial services sector differed markedly last year,according to region and sector. Capital investment in Franceis still in deep decline compared with levels at the beginningof the decade, reacting to the slightest market fluctuation.However, efforts undertaken by the Group’s business unitsto specialise by process and thereby submit differentiatingproposals are proving successful. In particular, services linkedto information processing and communication networks inindustrial envrionement are expanding.The network’s linkages have often made a critical difference by enabling usto offer the type of global solution that meets market expectations.

In the building services sector, our companies are still facing a difficult environment despite being involved in programssuch as education and health, where the upgrading of existingbuildings has become necessary due to increasingly stringent

safety regulations.This is especially true in regions, such asNord-Pas-de-Calais, where a project has been completedwith investments linked to the cross-Channel tunnel.

The Group’s business units are also intensifying their effortsto raise service levels and move towards increasinglyinnovative offers in intelligent building systems, networkintegration or maintenance.

Internationally, the market remained favourable in GreatBritain and the Netherlands.Whereas, a significant downturnin the German market has hampered CONTROLMATIC’ssales throughout the year, affecting profits and cancelling outthe recovery the company had made in 1996.

Results.

The GTIE Group reported consolidated turnover of FRF11.2 billion for 1997, in its first year of its new organisation,effective on January 1, 1997, which merged the GTIEGroup (retained its previous structure), SDEL and SANTERNE.

In achieving this result, which is in line with the figure for1996, the Group’s 450 business units successfully withstood a difficult economic climate worldwide andorganisational change.

Profit before tax and employee profit sharing, and afteramortisation of FRF 24 million in goodwill, amounted toFRF 358 million, representing 3.2% of turnover, in line withthe previous year’s figure (FRF 341 million).

Net profit before earnings of consolidated companies andafter minority interests reached FRF 160 million (or 1.43%of turnover) and net profit of FRF 159 million wasrecorded.

The Group’s net cash position improved throughout theyear, standing at FRF 1,981 million at 31 December 1997.

Cash flow generated over the year amounted to FRF 540million, enabling the Group to easily cover capital investments and financial flows.

Group Management Report

25

The Outlook for the GTIE Group in 1998

A pivotal year in the GTIE Group’s history, 1997 witnessedthe birth of a new group, the growing strength of itsoperational mechanisms, the centralisation of itsinformation systems, the implementation of requisite legalrestructures and the process of learning to live together.

Our projects and budgets for 1998 attest to genuineconfidence and a strong willingness to go forward, despitethe current lacklustre economic environment.

These positive goals will motivate the GTIE Group’s teamsto approach their markets and their customers with evengreater determination in 1998.

(in thousands of French francs) 1997 1996

Net turnover 11 169 074 6 291 256

Other operating revenues 181 231 30 825

Materials cost of sales (2 947 505) (2 051 680)

Outside services (3 046 149) (1 322 738)

Payroll (4 286 638) (2 392 151)

Other operating expenses (338 409) (157 850)

Depreciation and provisions (302 368) (158 197)

Operating Profit 429 236 239 465

Interest profit 64 559 37 804

Interest charges (21 835) (22 953)

Financial provisions 34 110 22 868

Net interest expense 76 834 (8 017)

Operating profit after interest 506 070 231 448

*Non-operating profitgains on disposals of assets 18 059 5 726

*Non-operating expenseand other non-operating profit (43 438) 11 213

Provisions for exceptional items (97 787) 5 229

Net non-operating profit/(expense) (123 166) 22 168

Profit before tax,employee profit sharing and goodwill 382 904 253 616

Amortisation for goodwill (24 391) (19 151)

Employee profit sharing (26 876) (20 166)

Corporate tax (171 771) (96 405)

Net profit of fullyconsolidated companies 159 866 117 894

Equity in net earningsof associated companies 80 188

Net profit before earningsof associated companies 159 946 118 082

Minority interests (1 313) (17 253)

Net profit 158 634 100 830

Our forecasts for the coming year, which have beencarefully calculated, take into account our intention torefocus some projects and also to recognise the economicdifficulties affecting some of our business sectors, especiallythose which are energy-related.

Orders taken and invoicing in the early weeks of 1998confirm these forecasts.

Consolidated profit and loss statement

26

Consolidated balance sheet

(in thousands of French francs) 1997 1996

Fair value adjustments 57 631 38 932

*Other intangible assets 13 480 6 844

Deferred charges 51

71 111 45 827

Goodwill 297 039 228 820

Owned property, plant and equipment 2 281 502 1 620 272

Construction in progress 8 482 7 323

Depreciation (1 533 346) (1 098 793)

756 638 528 802

Non-consolidated investments 91 448 10 347

Investments accountedfor by the equity method 1 733 48 290

Other long-term investments 41 575 16 549

134 756 75 186

Total fixed assets 1 259 544 878 635

Stocks and work in progress 7 074 820 4 472 496

Accounts receivable 4 877 776 3 099 135

Deferred tax assets 16 060 11 883

11 968 656 7 583 514

Other receivables 1 883 518 675 684

Short-term investments 123 945 191 708

Cash and other short-term funds 234 477 193 797

2 241 940 1 061 189

Total current assets 14 210 596 8 644 703

Total assets 15 470 140 9 523 338

(in thousands of French francs) 1997 1996

Capital 621 944 296 909

Share premium account 413 772 78 240

– Retained earnings (25 092) 177 303

– Foreign currency translation reserve 5 764 1 318

– Net profit 158 634 100 830

Shareholders’ equity 1 175 022 654 600

Minority interests

– in reserves 13 468 78 292

– in net profit 1 313 17 253

Minority interests 14 781 95 545

Shareholders’ equityincluding minority interests 1 189 803 750 145

Grants and provisions 762 287 253 175

Long-term borrowings 97 083 64 144

Other long-term debt 26 750 45 883

Total long-term capital 2 075 923 1 113 347

Trade accounts payable 1 757 909 890 664

Other accounts payable 11 465 681 7 347 157

Deferred tax liabilities 101 73

13 223 691 8 237 894

Short-term borrowings 92 872 109 129

Other short-term debt 77 654 62 968

170 526 172 097

Total current liabilities 13 394 217 8 409 991

Total Liabilities andShareholders’ equity 15 470 140 9 523 338

Assets

Liabilities and Shareholders’ equity

27

(in thousands of French francs) 1997 1996

SOURCES OF FUNDS

Funds from operations

Net profit before earningsof associated companies 159 866 117 894

Dividend received fromassociated companies – 24 638

Depreciation and provisions 398 347 184 371

Cash flow from operations 558 213 326 903

Gains from disposals of assets (18 059) (5 722)

Cash flow 540 154 321 181

Non-operating activities

Issue of parent company stock 833 015 280 586

Issue of subsidiaries’ stock 59 478 282

Increase in long-term borrowings 70 182 43 266

Proceeds from disposalsof tangible/intangible assets 60 989 14 247

Proceeds from disposals of investments 7 684 8 732

Interest collectedon long-term loans and deposits 7 356 4 213

Total funds from non-operating activities 1 038 704 351 326

Total sources of funds 1 578 858 672 507

USES OF FUNDS

Capital expenditure

Acquisition of investments 270 779 190 798

Acquisition of other financial fixed assets 947 668 29 383

144 151

Total funds used in investing activities 1 218 591 220 332

Other uses of funds

Increase in long-term loans and deposits 6 815 4 106

Repayment of long and medium-term debt 90 480 43 096

Dividends paid 68 577 359 303

Total other uses of funds 165 872 406 505

Total uses of funds 1 384 463 626 837

Net sources/(uses) of funds 194 395 45 670

Working capital:

– Effect of changes in Group structure 385 062 6 081

– Effect of exchange rate fluctuations (1 454) (1 476)

– Effect of balance sheet reclassifications:short-term/long-term 3 664 2 229

Change in working capital 581 667 52 504

USE OF THE CHANGE IN WORKING CAPITAL

Change in working capital requirement

Changes in stock and work in progress 2 602 324 51 169

Changes in receivables 1 782 818 (48 946)

Charge in accounts payable (4 985 798) (187 130)

Net change in workingcapital requirement (600 656) (184 907)

Change in short-term debt

Change in short-term borrowing 1 571 52 864

Change in other short-term receivables 1 207 835 67 800

Net change in short-term debt 1 209 406 120 664

Change in cash and cash equivalents (27 083) 116 747

Consolidated statement of changes in financial position

28

Design, printing and English adaptation : SDE Conseils en Information - Levallois

Photographs: Photogram-Stone (Baxter, Braaschy, Cambon, Duka, Eastep-Jons, Konin, Lamg, Mercer,Monneret, Myers, O’Clair, Reese, Stewart,Thatcher,Thomaidis,Wolman).

M.Baret, Baxter- Eastep, Deritend, Drouin, J.L. Fernandez, Fournie-Grospaud, GTIEA. Hatat, Image'In, G. Lefauconnier, Photogram-Stone, Sipa-Image,Vigouroux

COMPAGNIE GÉNÉRALE DE TRAVAUX ET D’INGÉNIERIE ÉLECTRIQUE

Limited Compagny capitalized at FRF 621,944,000 - RCS Versailles B 391,635,844 - Siret: 391,635,844,00023 - NAF 453A

280, rue de Mai 1945 - BP 72 - 78368 Montesson Cedex

Tel-: (33-1) 30 86 70 10 Fax-: (33-1) 30 86 70 01